Cost of car insurance in California spikes in 2024
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The cost of car insurance in California has spiked this year, surpassing the national average, as rates increase across the U.S.
Why it matters: Fast-rising insurance rates are contributing to a transportation affordability crisis, especially in the many parts of the country where people have few alternatives to car ownership.
- And they come alongside all sorts of other rising consumer costs in recent years, like groceries.
Driving the news: The nationwide average annual cost of full-coverage car insurance hit $2,329 in June, per Insurify, a digital insurance agent that helps users collect quotes from multiple insurers.
- That's up from $1,601 in January of 2021.
Zoom in: California car insurance rates rose from $1,738 in December 2023 to $2,417 in June 2024.
- That's a nearly 40% jump in six months.
What they're saying: "Rate increases this year are largely a continuation of hikes in 2023, a year that saw full-coverage premiums rise by 24% in response to insurers' record underwriting losses the year prior," Cassie Sheets, data journalist at Insurify, told Axios via email.
- "California froze insurance rates during the pandemic. To try and overcome substantial losses, some insurers are requesting double-digit rate hikes," she said.
Zoom out: Rates are highest in Connecticut ($3,598), Maryland ($3,400) and South Carolina ($3,336), while they're lowest in New Hampshire ($1,000), Maine ($1,209) and North Carolina ($1,403).
How it works: Insurify's monthly figures are two-year rolling medians to account for "extreme market volatilities" in recent years, the company says.
- And they're based on rates for drivers between ages 20-70 with clean driving records and at least average credit scores.
The big picture: Several factors play into the difference in rates between states, including road conditions, accident rates and whether a state requires no-fault coverage (meaning plans must cover medical expenses regardless of who's at fault in an incident).
- Individual people's quotes, meanwhile, also take into account their age, gender, driving record, etc.
The intrigue: Insurers are increasingly using data about people's actual driving behavior to inform their rates — sometimes with drivers' explicit knowledge and sometimes less so, per the New York Times.
- In March, General Motors quit sharing details about drivers' behavior with data brokers that worked with insurers to create "risk profiles" following the Times' reporting on the practice.
The bottom line: If you're looking to save on insurance, try shopping around — sometimes you're more likely to get a deal with a new provider.
- And if you're a homeowner, look into bundling your home and auto coverage to save on both.